Post-Katrina gas profits a record

March 25, 2006|By JULIE SCHARPER | JULIE SCHARPER,SUN REPORTER

Maryland gas stations earned record profits in the days after Hurricane Katrina as station owners and suppliers raised prices well above necessary, Attorney General J. Joseph Curran Jr. wrote in a letter to Senate leaders this week.

Curran found no violation of Maryland law but recommended that the state adopt measures to prevent price-gouging in future crises.

Profit margins were higher in early September than before the hurricane struck, Curran wrote in his letter, dated Wednesday.

Average gas prices climbed to $3.26 a gallon for regular unleaded gasoline in Maryland on Sept. 2, up 53 cents from the previous day, according to AAA's Daily Fuel Gauge report.

Gas station owners defended their industry, saying that they are at the mercy of suppliers.

"Some of our guys only have a 3- cent-per-gallon profit," Marta Gates, director of operations for the Washington, Maryland, Delaware Service Station and Automotive Repair Association, said yesterday.

The association represents about 500 service stations in Maryland.

Efforts to reach the Mid-Atlantic Petroleum Distributors Association, a lobbying group for fuel suppliers, were unsuccessful.

Under legislation pending before the General Assembly, petroleum suppliers and gas station owners, along with other retailers of essential goods, would be restricted in how much they could raise prices during or 180 days after a declared state of emergency.

People who sell fuel, food, medical supplies, building materials and other key goods at prices more than 10 percent higher than rates in the two months before a declared emergency could face charges - and up to a year in jail and a $1,000 fine, if convicted - unless they could prove they were passing along price increases from suppliers.

Yesterday, the Senate Judicial Proceedings Committee approved the bill, which could be debated on the Senate floor as soon as next week, said the sponsor, Sen. Leo E. Green, a Prince George's County Democrat.

"The governor was the one who said that he did not have the power to prosecute the price-gougers," Green said. "This will give him that power."

Gov. Robert L. Ehrlich Jr. has not taken a position on the bill, said spokeswoman Shareese N. DeLeaver.

In the past, the governor has expressed opposition to price regulation, DeLeaver said, adding that historically the legislature has had a hard time defining gouging.

Rep. Samuel I. Rosenberg, a Baltimore Democrat, is sponsoring an identical bill, which is still in committee in the House.

He is optimistic that the bill will be approved.

"With a bill such as this, you would have the attorney general with trained lawyers and subpoena power able to determine whether price gouging had occurred," Rosenberg said. "That's better than speculation and rumor."

The Mid-Atlantic AAA is not taking a position on the legislation, a spokeswoman said.